Data tracked by Link Asset Services reveal dividends paid to holders of UK shares jumped to a record high in the first three months of the year, putting investors on track for £100 bn in payouts this year. The payments rose 15.7 per cent to £19.7 bn, an easy first-quarter record. Regular dividends have risen every year since the aftermath of the global financial crisis in 2009. TUC General Secretary, Frances O'Grady said the figures underlined the inequality between rewards for shareholders and workers, and said the economy needed to be redesigned to ensure everyone got a fair share.
The big increase in dividend income in the first quarter of 2019 was mainly driven by a £2.6 bn special dividend from the FTSE 100 mining company BHP. The largest dividend payment in the quarter, at £2.9 bn, was the oil company Royal Dutch Shell, while pharma company Astrazeneca, oil giant BP, Vodafone and British American Tobacco all paid out more than £1bn in the quarter.
Michael Kempe, chief operating officer at Link Market Services, said the growth in dividends was "in truth, a touch weaker than we expected on an underlying basis." He said 2019 was set for further increases in payouts to shareholders despite uncertainty about the global economy and Brexit negotiations in the UK. Link predicts total annual UK dividend payments will break £100 bn for the first time in 2019.
Data from the Office for National Statistics said real average weekly earnings peaked at £525 in February 2008, just as the crisis began, but have not yet surpassed that value. Analysis of separate government figures by the Institute for Fiscal Studies in March showed that the median income recorded 0 per cent growth after adjusting for inflation in 2017-18.
O'Grady said the 'portion of national income going to workers was declining around the world. "At a time when millions of working people are struggling to make ends meet, shareholders are making a mint. We need to redesign the economy so that everyone gets a fair share. That means giving people more voice and power at work," she said. Chief executive of ShareAction, a group that campaigns for responsible investment, Catherine Howarth said, "As pleasing as these bumper dividends are for shareholders, it's right to ask if company boards have their priorities straight when dividend payouts could have been used to address chronic low pay."
She added, “Six of the UK’s 10 top dividend payers are still not living wage employers – Shell, BP, Vodafone, BAT, Imperial and BT. ShareAction calls on big shareholders, especially pension funds acting on behalf of working people, to signal to UK listed companies that dividends should not be distributed at the expense of decent wages, and certainly not before all staff earn at least the UK living wage.”
